How to Stay Compliant with Client Insurance Requirements as a 1099

In today’s freelance-driven economy, more companies are outsourcing key tasks to independent contractors—but they’re also tightening their compliance standards. If you’re a 1099 contractor, chances are high that your clients require specific insurance coverage before you can begin work.

Whether you’re a freelance designer, construction subcontractor, consultant, or IT specialist, staying compliant with client insurance requirements is essential—not just to land the contract, but to protect yourself and maintain your reputation.

At Bunker Insurance, we specialize in helping 1099s navigate compliance with ease. Here’s how to stay ahead of client insurance demands without the stress.

✅ Why Clients Require Insurance from 1099 Contractors

When a company hires a contractor, they want to limit their liability if something goes wrong. By asking you to carry certain types of business insurance, clients shift that risk away from themselves—and onto your policy.

Typical reasons clients require insurance include:

• Liability protection from your work (Errors & Omissions / Professional Liability) 
• Workplace injury coverage (Workers’ Comp) 
• Proof of professionalism through a Certificate of Insurance (COI) 
• Contractual risk transfer, especially for construction or consulting work 

Bottom line: if you’re not properly insured, clients may delay onboarding, hold payments, or drop you entirely.

🔍 Common Insurance Requirements for 1099 Contractors

Most companies won’t leave it vague—they’ll specify exactly what insurance they expect you to carry. These are the most common policies they require:

1. General Liability Insurance

Covers bodily injury, property damage, and personal injury. Often mandatory for contractors working on-site.

2. Professional Liability (Errors & Omissions)

Crucial for knowledge-based or creative work. Protects against claims of negligence or missed deliverables.

3. Workers’ Compensation Insurance

Some states require it even for solo contractors. Many clients require proof of it to avoid misclassification liability.

4. Cyber Liability Insurance

If you handle sensitive data, this may be required, especially in IT or digital marketing contracts.

5. Business Auto Insurance

For 1099s using personal vehicles for business—especially common in delivery or construction roles.

📄 How to Read and Interpret Client Insurance Requirements

Your contract might include a section titled “Insurance Requirements” or “Contractor Risk Management.” Here’s how to decode it:

• Minimum coverage limits: e.g., $1M per occurrence, $2M aggregate 
• Types of policies: e.g., general liability, E&O, auto, etc. 
• Additional insured: Clients may ask to be named on your policy 
• Waiver of subrogation: Prevents your insurer from suing the client after paying a claim 
• Proof of coverage: Typically provided via a Certificate of Insurance (COI) 

If anything is unclear, don’t hesitate to ask the client for clarification—or contact an insurance professional.

🚀 How to Stay Compliant (Without Slowing Down Your Work)

At Bunker, we believe insurance shouldn’t get in the way of doing business. Here’s how to keep your compliance streamlined:

✔️ Use a platform that generates instant COIs

A delay in delivering a Certificate of Insurance can cost you time or even the contract. Bunker allows you to create and share COIs instantly, customized to meet your client’s exact needs.

✔️ Choose flexible monthly coverage

Freelancers often need to scale coverage up or down depending on the project. We offer month-to-month policies, so you only pay for what you need.

✔️ Review contracts before signing

Before committing to a project, compare the insurance requirements with your current coverage to avoid surprises.

✔️ Add clients as additional insured when required

We can handle this directly through your policy and issue updated COIs within minutes.

🧠 Final Thoughts: Compliance is a Business Advantage

Instead of seeing insurance requirements as a hurdle, think of them as a competitive advantage. Clients trust contractors who are professionally insured—it signals that you take your work, and their risk, seriously.

With Bunker, you can meet client insurance requirements, generate instant COIs, and focus on what you do best—without worrying about compliance issues.

Need coverage fast? Visit buildbunker.com or contact us at support@buildbunker.com to get insured today and keep your client contracts moving.